The next question was in regard to the rate of duties on imports and exports.  After a careful consideration of the matter, I recommended that the tariff be not changed until the question had been fully studied and ample notice given.  General Merritt approved this and the customs are being collected on the Spanish tariff.

About a week after the Custom House was opened certain parties came to me representing that Consul General Wildman, of Hongkong, had informed them that United States goods would be admitted free of duty in Manila, that acting on this they had purchased a cargo of American illuminating oil in Hongkong, and that the payment of the heavy duty on it ($30 per ton, or about 8c per gallon) would ruin them.  On consulting Lieutenant Colonel Crowder, Judge Advocate of the Eighth Army Corps, he pointed out the language of paragraph 5 of General Merritt’s proclamation, which followed literally the instructions of the President, viz:  “The Port of Manila will be open while our military occupation may continue, to the commerce of all neutral nations as well as our own, in articles not contraband of war, and upon payment of the prescribed rates of duty which may be in force at the time of the importation.”

Under this there was clearly no authority for discriminating in favor of American goods, either coming direct from a United States Port or by transshipment at Hongkong.

The Collector of Customs was directed to act accordingly.

Another question was in regard to the importation of Chinamen into Manila.  The Consul at Hongkong telegraphed to know if they would be admitted.  As there had been no time for examining the treaties and laws in force on this subject, I replied with General Merritt’s approval that for the present it was not practicable to admit Chinese laborers into Manila.

Another very important question which arose was in regard to trade with the other Philippine islands.  Nearly all the hemp and the greater part of the sugar is grown in the Visayas.  The hemp is bought by foreign merchants in Manila, who bring it there from the other islands, and export it, paying large duties to the Manila Custom House.  These merchants were anxious to bring up their stock, of which a large amount had accumulated during the war, and ship it abroad.  The ships engaged in this island trade were idle in the Pasig.  They belonged to a Spanish corporation, owned entirely by Scotch capital, and had a Spanish Register.  The owners were ready to transfer them to the American flag.  Could these vessels be allowed to clear for the ports of Cebu and Iloilo, which were in Spanish possession?  The Judge Advocate advised me that they could not, without the express authority of the President.  I so notified the owners of the ships and the hemp merchants.  The day before I left Manila, however, Admiral Dewey received a cable from the Navy Department stating that Spanish ships had been granted the privilege